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Established Contributor
Posts: 562
Registered: ‎08-16-2007
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Re: how quickly does paying off credit cards help

from what i've seen, you should take a minimum of 6 months to pay down an account if you can. it has a FAR greater impact on your scores than paying in one lump sum.
09/28/07 EQ 498 EX 537 TU 477
12/27/07 EQ 526 EX 562 TU 541
02/26/08 EQ 526 EX 589 TU 579
11/09/08 EQ 562 EX 648 TU 578
Moderator Emeritus
Posts: 16,382
Registered: ‎03-12-2007
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Re: how quickly does paying off credit cards help



orhippychic wrote:
from what i've seen, you should take a minimum of 6 months to pay down an account if you can. it has a FAR greater impact on your scores than paying in one lump sum.


Not so at all! When paying down CC debt, the quicker the better.
Credit Profile:
FICO 9: EQ 833 ~ EX 828 ~ TU 824 (07-12-2017)
FICO 8: EQ 830 ~ EX 819 ~ TU 828 (07-12-2017)
FICO 8 Bankcard: EQ 851 ~ EX 849 ~ TU 851 (07-12-2017)
Credit History: 29 years ~ AAoA: 14 years
Total available revolving credit: 157K ~ Cumulative Util: 3% (1 CC reporting a balance)
Inqs: 1 EX (new)
14 Total Accounts on Reports: 9 open, 5 closed. 1 newly opened installment account
Established Contributor
Posts: 562
Registered: ‎08-16-2007
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Re: how quickly does paying off credit cards help

hmm, i understand that a lower UT is better, but if you have the money in hand to pay it off, wouldn't your scores benefit more by making 6 HUGE payments rather than 1? doesn't the history help you more? I used the simulator to estimate scores to pay off my $1500 revolving debt. paying at once gave maybe a 10pt gain, while paying 6 months gave me a 50-100pt projected increase. please edu-ma-cate me. Smiley Wink
09/28/07 EQ 498 EX 537 TU 477
12/27/07 EQ 526 EX 562 TU 541
02/26/08 EQ 526 EX 589 TU 579
11/09/08 EQ 562 EX 648 TU 578
Moderator Emeritus
Posts: 7,326
Registered: ‎06-18-2007
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Re: how quickly does paying off credit cards help

when paying down CC...UTIL goes down & is good for scores.....just pay down DO NOT close account....open accounts in good standing (that are active) never fall of & help hx.
Moderator Emeritus
Posts: 7,326
Registered: ‎06-18-2007
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Re: how quickly does paying off credit cards help

Any late payment hurts alot!  pay down & send a GW
 
Never never be late....it is always the first thing that gets reported!
Frequent Contributor
Posts: 406
Registered: ‎08-11-2007
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Re: how quickly does paying off credit cards help

The thing about an immediate payoff or paydown is that your Util will be down, which will boost your score and then you could ask for a CLI, which if granted can boost your score, because your overall available credit is higher; also with the boosted score from the reduced Util will put you in the position to ask for reduced APRs ON ALL OF YOUR CARDS. At that point your debt service per payment on the other cards is less, and you'll be making a big dent in the principle owed.
Moderator Emerita
Posts: 28,095
Registered: ‎04-01-2007
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Re: how quickly does paying off credit cards help

As I understand it, FICO is just a snapshot and shows what your balances and credit limits and baddies are at that very moment, so the closer to 1%, the better. I know what you mean about the simulator--I've seen it too--maybe what it means is that if you keep up the habit of paying almost all the way off, each month after month on any account, the scores will be even higher. But then each report is not a snapshot, hmmm.....
 
Tuscani and fused, help! If the scores are snapshots, how does FICO know about a pattern of regular payments, other than there are no 30's littering up the place? Either it is, or it isn't, looking at what's going on that very moment! aaarghhhh   Smiley Surprised
 
 
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Established Contributor
Posts: 562
Registered: ‎08-16-2007
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Re: how quickly does paying off credit cards help

the thing that stuck in my head is Brammy's advice about letting time heal your scores. i'm here to learn just like everyone else so i'm interested to hear what others think. i guess it mostly just depends on what your goals are. one could choose to do things one way or another depending on whether getting out of debt is the goal, or upping scores, etc...
09/28/07 EQ 498 EX 537 TU 477
12/27/07 EQ 526 EX 562 TU 541
02/26/08 EQ 526 EX 589 TU 579
11/09/08 EQ 562 EX 648 TU 578
Moderator Emeritus
Posts: 16,382
Registered: ‎03-12-2007
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Re: how quickly does paying off credit cards help



haulingthescoreup wrote:
As I understand it, FICO is just a snapshot and shows what your balances and credit limits and baddies are at that very moment, so the closer to 1%, the better. I know what you mean about the simulator--I've seen it too--maybe what it means is that if you keep up the habit of paying almost all the way off, each month after month on any account, the scores will be even higher. But then each report is not a snapshot, hmmm.....
 
Tuscani and fused, help! If the scores are snapshots, how does FICO know about a pattern of regular payments, other than there are no 30's littering up the place? Either it is, or it isn't, looking at what's going on that very moment! aaarghhhh   Smiley Surprised
 
 


Yes, your util% is like a snapshot. When your credit reports are pulled they do not show any util% history unlike like payment history which does-...only your current util% at the moment the reports are pulled.
 
Credit Profile:
FICO 9: EQ 833 ~ EX 828 ~ TU 824 (07-12-2017)
FICO 8: EQ 830 ~ EX 819 ~ TU 828 (07-12-2017)
FICO 8 Bankcard: EQ 851 ~ EX 849 ~ TU 851 (07-12-2017)
Credit History: 29 years ~ AAoA: 14 years
Total available revolving credit: 157K ~ Cumulative Util: 3% (1 CC reporting a balance)
Inqs: 1 EX (new)
14 Total Accounts on Reports: 9 open, 5 closed. 1 newly opened installment account
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Regular Contributor
Posts: 129
Registered: ‎05-12-2007
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Re: how quickly does paying off credit cards help

Here is the bottom line...In my own opinion, if you have a high utilization of your credit card debt and you REDUCE that utilization of credit card debt to below 9%, you are going to see a significant increase in your FICO scores - period.  This is a fact simply because your credit card utilization represents 35% of your FICO scores.  Therefore, significantly reducing your close-to-maxed-out credit card debt (whether immediately or over several months seems to be irrelevent) will cause a hugh increase in your FICO scores.  Good luck and go for it!

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